US equity markets fell sharply last Friday (21 December) to cap their worst week since August 2011 and push the technology-centric Nasdaq into bear market territory - Dow down -414-points or -1.81% after trading up as much as +395-points earlier in the session. The broader S&P500 fell -2.06%, The NASDAQ tumbled -2.96% to 6,332.99, with every member of the FAANG cohort losing more than >2.5% (i.e. Facebook Inc down -6.33%, Amazon Inc -5.71%, Apple Inc -3.89%, Netflix Inc -5.45% and Google parent Alphabet Inc -2.96%). The index sits ~22% below its record high of 8,109.69 touched on 29 August. According to Dow Jones Market Data, the last time the Nasdaq entered a bear market was 3 March, 2009. Markets received a boost earlier in the session after Federal Reserve Bank of New York President John Williams told CNBC that the central bank could reassess its interest rate policy and balance sheet reduction in the new year if the economy slows. However, disfunction in Washington and fresh trade uncertainty again weighed on investor sentiment. The federal government partially shut down for the third time this year early Saturday (22 December) as lawmakers in Washington continued to wrangle over funding for President Trump’s proposed border wall. President Trump’s trade adviser, Peter Navarro, told Nikkei that it would be “difficult” for the US and China to arrive at a permanent economic agreement after a 90-day ceasefire in the trade tensions. The latest falls on equity markets came amid heavy volume, with more than >12B shares changing hands on US exchanges - the heaviest volume since August 2011. Trading volume was was underpinned by “quadruple witching”, the simultaneous expirations of stock-index and individual stock futures and options, along with the re-balancing of the S&P 500 index. For the week, the Dow fell -6.87% to log its worst weekly percentage decline since October 2008, S&P500 -7.05% and sits 17.8% below its record high, and the Nasdaq -8.36%. The Dow and S&P 500 - which are both in correction territory - are on track for their worst December performance since the Great Depression in 1931, down more than >12% apiece this month
